Opinion 2002 -
16

This
opinion represents the views of the Office of the State
Comptroller at the time it was rendered. The opinion may no
longer represent those views if, among other things, there have
been subsequent court cases or statutory amendments that bear on
the issues discussed in the opinion.

CONSTITUTIONAL LAW -- Gifts and
Loans (payments to not-for-profit corporation to publicize resources
available in downtown area)
MUNICIPAL CORPORATIONS -- Powers and Duties (publicizing resources
available in downtown area)
MUNICIPAL FUNDS -- Appropriations and Expenditures (expenditures to
publicize resources available in downtown area); Publicity Funds
(expenditures to publicize resources available in downtown area)
TOWNS -- Powers and Duties (expenditures to publicize resources
available in downtown area)
VILLAGES -- Powers and Duties (expenditures to publicize resources
available in downtown area)

STATE CONSTITUTION, ARTICLE
VIII, §1; TOWN LAW §64(6), (14), (23); VILLAGE LAW §§1-102(5),
4-412: Subject to equal protection considerations, a town or a village
may expend publicity fund monies under a contract with a not-for-profit
corporation, to advertise and publicize resources available in the
downtown area of the town or village, including a day labor hiring site,
and to monitor and document the use of such resources.

You ask whether a coterminous
village/town may enter into a contract for the payment of monies to a
not-for-profit corporation for the performance of certain services in
relation to the use of a day labor hiring site by contractors and day
laborers who would otherwise congregate outside and cause congestion in
the downtown area of the village/town. The hiring site was established
by the not-for-profit corporation and is located in a building within
the village/town leased by the corporation. The services to be performed
by the not-for-profit corporation would include: advertising and
publicizing the hiring site; encouraging use of the site; and monitoring
and documenting use of the site. 1

Initially, we note that article
VIII, section 1 of the State Constitution generally prohibits towns and
villages from giving or loaning money or property to or in aid of any
individual, private corporation or association, or private undertaking.
There is no exception to this prohibition for not-for-profit
organizations (see e.g. 1986 Opns St Comp No. 86-44, p 72), even if the
activities of the not-for-profit corporation serve a laudable purpose
(see, e.g. 1986 Opns St Comp No. 86-70, p 109). Article VIII, §1,
however, does not prohibit the payment of monies by a town or village to
a not-for-profit corporation pursuant to either a statutory obligation
or contractual arrangement under which the town or village receives fair
and adequate consideration, even though there may be an incidental
benefit accruing to the not-for-profit corporation (see, e.g., Schulz
v Warren County, 179 AD2d 118, 581 NYS2d 885 lv den 80 NY2d 754,
587 NYS2d 906; Murphy v Erie County, 28 NY2d 80, 320 NYS2d
29; Opn No. 86-70, supra).

It is also well established
that, except where constitutional provisions are controlling, towns and
villages, as municipal corporations, have only those powers expressly
granted by statute and such additional powers as may be
"necessarily" or, in the case of villages,
"necessarily" or "fairly" implied from their express
powers (see Village of Atlantic Beach v Kimmel, 18 NY2d
485, 276 NYS2d 993; Town Law §64[23]; Village Law §1-102[6], [7]; cf.
Wells v Town of Salina, 119 NY 280). In this regard, we
note that towns and villages have express general authority to enter
into contracts in furtherance of the performance of their corporate
functions (Town Law §64[6]; Village Law §1-102[5]; see, e.g., Massagli
v Bastys, 141 Misc 2d 357, 532 NYS2d 638).

Towns and villages may establish
publicity funds to be expended for the purpose of advertising the
advantages of the town or village and promoting the general, commercial
and industrial welfare of the town or village (Town Law §64[14], also
setting forth the maximum amount that may be appropriated into the fund;
cf. Village Law §4-412[1]). In the case of a village, the fund
must be established by local law (1998 Opns St Comp No. 98-22, p 56; 31
Opns St Comp, 1975, p 53; 30 Opns St Comp, 1974, p 82). We have
expressed the opinion that publicity fund monies may be used, for
example, to pay a chamber of commerce, pursuant to contract, an amount
to defray the cost of printing a phone directory and business guide
(1980 Opns St Comp No. 80-109, unreported).2

Similarly, here, it is our
opinion that a town or village, subject to equal protection
considerations, may contract with a not-for-profit corporation, to
advertise and publicize resources available in the downtown town or
village, including a day labor hiring site, in order to promote the
commercial and industrial welfare of the town or village and potentially
encourage the use of the site and other resources. In addition, it is
our opinion that such a contract may provide for monitoring and
documenting the use of the site and other resources, in order that the
town or village may gather information to help assess the results of the
publicity fund expenditure.3 So long as the
primary purpose of the contract is to further the purposes of the town
or village publicity fund, any incidental benefit to private entities
would not contravene the gift and loan prohibition of article VIII, §1
of the State Constitution (see Opn No. 80-671, supra).

Accordingly, it is our opinion
that a village/town may expend publicity fund monies under a contract
with a not-for-profit corporation to advertise and publicize the
availability of resources in the village/town downtown area, including a
day laborer hiring site, and to monitor and document the use of such
resources.

December 24, 2002

Marianne Stecich, Esq., Village
Attorney
Village/Town of Mount Kisco

1.
Although a proposed contract has been provided, we generally do not, in
our advisory opinions to local governments, comment on the propriety of
specific proposed contract provisions. Therefore, we will address the
question generally, without reference to any particular proposed
agreement.

2. The
primary focus of such a guide must be to further publicity fund purposes
and not the direct promotion of private business interests (see 1980
Opns St Comp No. 80-671, unreported).

3. Any
such contracts, however, would be subject to the appropriate procurement
processes (see General Municipal Law §§103, 104-b; Schulz v Warren
County, supra).